Local News

Health reform has financial pluses, minuses

Statistics, cost savings: Part 3 of a 4-part series

ByJENNI GRUBBS Times Staff Writer

Posted:
05/16/2013 02:08:32 PM MDT

Lorez Meinhold, of the Colorado Dept. of Health Care Policy & Financing, speaks at the Progressive 15 Affordable Care Act Summit May 2, 2013, at the Country Steak-Out in Fort Morgan. Meinhold shared state statistics about health-care reform and its associated costs and answered questions from the audience. (Jenni Grubbs/Fort Morgan Times)

Lots of questions remain about what health-care reform will really mean, as the Patient Protection and Affordable Care Act (ACA), often referred to as "Obamacare," goes into full effect in January 2014.

Local lobbying group Progressive 15 recently held a day-long summit at the Country Steak-Out in Fort Morgan to inform people about what those changes will be and their expected effects.

Part 1 of this series featured information from Amy Downs from the Colorado Health Institute; Part 2 had information about changes for employers, as well as for Colorado Medicare and Medicaid programs; Part 3 is on the presentation by Lorez Meinhold from the state Department of Health Care Policy and Financing; and Part 4 will be about the presentation from Kyla Hoskins from the Colorado Health Benefit Exchange.

Colorado health

Meinhold said her office was dedicated to "improving health care access and outcomes for the people we serve while demonstrating sound stewardship of financial resources."

That means helping people understand what is changing and how it affects them through presentations like the one in Fort Morgan.

She shared information about the reforms already enacted and those that were coming.

In 2010, she said, health-care reform meant that: dependent care coverage could be extended to adult children up to age 26; there were no pre-existing condition exclusions for children; there were no more lifetime limits on coverage; there were no rescissions, or rescinding of health care policies without cause; and free preventative care was added to new plans.

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And she said the changes coming in 2014 include: no annual limits on coverage; insurance policies were subject to guaranteed issue; they also were guaranteed renewability; there was no gender rating on polices; health status would not be considered for all, eliminating pre-existing conditions as a reason for policy denial; and there were limits set on how age, geography or tobacco use would affect insurance.

As part of her presentation, Meinhold also shared some statistics about health in Colorado.

For example, 22 percent of Colorado adults and 14.2 percent of children are considered obese.

About 18.3 percent of Colorado working-age adults were uninsured last year, as were 9.3 percent of kids.

At least 20.7 percent of pregnant Coloradans received initial prenatal care later than the first trimester or not at all.

About 28.7 percent of the state's preschool-age children did not receive all recommended doses of six key vaccines.

These statistics were influenced by the number of uninsured people, as well as other issues, such as poverty, unemployment and personal choices.

Health-care reform is seeking to have a positive impact on these statistics, Meinhold said.

Wellness benefits, the insurance mandate and more affordable options, no insurance premiums penalty for pregnancy and seeking prenatal care, making it easier to insure children and coverage of mental-health services are all parts of health-care reform.

Financing reform

Meinhold told the group that she understood that "the Affordable Care Act was about all the change people could handle."

But there are other changes that will have to happen to make the health care system sustainable, she said.

The expansion of Medicaid up to 133 percent of the federal poverty level will get more people insured through the government, leading to fewer uninsured emergency room, clinic and hospital visits by the poor.

And there will be tax credits available toward insurance premiums for those making up to 400 percent of the federal poverty level, she said.

Cost-sharing subsidies will be available for those making up to 250 percent of the federal poverty level. This could limit out-of-pocket spending on co-pays, deductibles and other costs.

Meinhold said the state was also making investments in the health care workforce and seeking to up the patient capacity at various clinics and facilities to handle the influx of the newly insured in 2014.

Other ideas include strengthening the network of coordinated care models in Colorado, she said.

These include: patient-centered medical homes; Accountable Care Collaboratives; further reforming payment systems, which began with legislation enacted in 2012; and making use of technology with managing health information.

But finding ways to prevent and manage chronic diseases also will play a part in this, she said.

One of the big question marks right now is how to switch from a system that pays per visit or per service to one that pays based on outcomes.

"Paying for everything, not based on outcomes, is not working," she said. "The incentive right now is to see people more with the visit-based system."

She said that lots of people, both in Colorado and around the nation, were trying to establish the new model.

"Is it global payment or global shared savings?" Meinhold said was the question they all were trying to answer. "We have folks right now really dedicated to figuring this out."

The progression that is being studied right now, she said, is one that shifts from the current fee-for-service (FFS) model to a blended FFS and care coordination model.

That could then move toward a gainsharing model and factoring in bundled payments, and it could eventually move toward a global payment model.

This last one moves the health-care system toward one of shared risk and shared accountability between payer and provider, Meinhold said.

She said that the state expects that with reform, "we will be able to bend the cost curve by $280 million."

She said one way that this will happen is by using the technology available to reform the structure of the health-care business.

For example, she said that the Accountable Care Collaborative had reduced Medicaid health costs by $20 million so far.

This comes at a price to the industry, though.

"It's all reduction in a hospital's bottom line," she said. "If we don't figure out how to replace that, it's not sustainable."

Medicaid expansion

Meinhold called the state's adopting of Medicaid eligibility expansion "the right choice for Colorado."

She said that would allow Medicaid to cover more than 160,000 Coloradans -- many if not most of them having been uninsured before.

"Expansion allows us to cover more people with the right services at the right time and drive value in the system," she said.

She said that in 2013, 133 percent of the federal poverty level was $31,321 for a family of four or $15,282 for an individual.

Meinhold said another benefit of having more people covered through Medicaid would be that it would "support Colorado's health and economy by helping people stay healthier over the long term."

And accepting the federal money making Medicaid expansion was the best deal for Colorado, she said.

She said this would allow provider fee dollars to stretch further because of the "enhanced federal matching funds."

Another bonus was that the state expected the Medicaid expansion to have no impact on the stretched-too-thin General Fund.

Meinhold also shared some plans for how the state would see $280 million in savings from Medicaid over the next 10 years.

She said that enhancing value-based services would be a part of that, saving money from not having people receive more expensive services when the less costly ones were just as effective.

Increasing effectiveness in care delivery was a big part of that plan, she said, with the outcomes playing a larger part in setting the value of a service than the type of service.

As with the overall health-care system reform plans, that involves reforms to payment systems so that they "reward value instead of volume" for caring for Medicaid patients, she said.

Leveraging health information technology "to improve quality and efficiency of care" is also part of the Medicaid savings plan, she said.

But another important factor in this is "redesigning administrative infrastructure and reducing fraud, waste and abuse," Meinhold said.

The Accountable Care Collaborative she mentioned has helped the state reduce Medicaid health costs by $20 million so far.

It also has returned almost $3 million to state and federal taxpayers since it began, she said.

And among Accountable Care Collaborative patients, there was an 8.6 reduction in hospital re-admissions, only a .23 increase in emergency room visits and a 3.3 percent reduction in use of high-cost imaging.

Questions, reactions

The audience had quite a few questions for Meinhold.

One man asked whether COBRA -- which allows former employees to stay on their former employer's insurance by paying the full cost -- would go away with health reform.

"No, but there will be less of a need for it because of the exchange and the new rules," Meinhold said. "There is nothing that eliminates Colorado from continuing to provide COBRA."

Deborah Massey-Beck, the executive director of Caring Ministries of Morgan County, asked whether there would still be a one to seven-month waiting period for finding out about whether a person would get Medicaid coverage.

"They'll be able to get access to some of the services earlier," Meinhold told her, and there would be new, simplified systems for applying, but she said that there likely would still be wait times.

"We're building whole new systems" for processing applications, Meinhold said, "but we're not going to be perfect."

She told her audience that it was important "to set the right expectations" for what reform would and would not mean, but that it also was "important to move forward."

She said that she knew that Obamacare was not popular with everyone, but that "the presidential election did affect which pieces would or would not stand."

And Meinhold said that going through the big 2014 transition is "going to take hard work and commitment from all of us."

She said that there would be assistance and help on websites and from insurance brokers to help people through that transition.

"It's going to take a whole lot of people directing people where to go," she said.

Progressive 15 Co-Chair Bob Churchwell said he thought the summit went well.

"I think some good information was delivered today to you to take back to your communities as far as how the changes will work," he told the Progressive 15 members.

Churchwell said he was "encouraged" that so many people from the health care industry had attended the summit.

"It gives me hope that they're educating themselves," he said. "That's what Progressive 15 is supposed to do: put these things together to educate the rural community about what the government is doing."

Sandy Schneider-Engle, director of community relations at Colorado Plains Medical Center, said she went to the summit "just because I work in the health care field" and wanted to find out more about what was happening.

"There's a lot of new information," she said. "And it's good to reinforce things I was aware about, but it also mentioned things I didn't know about."

Schneider-Engle said that Meinhold had talked about how Colorado was "one of the states that was very progressive" in dealing with health-care reform.

She said Meinhold's presentation had "shed a positive light on something we have that is very new, scary and bewildering to some."

Afterward, Meinhold said he had had "a lot of good questions."

"There are so many different aspects of this," she said.

She said doing the type of presentations she did for Progressive 15 was important in helping people understand "how they as an individual or business will be impacted."

And she said that there had been commonality in what she heard on the provider panel, that the pay model did need reforming.

"There was some excitement and fear with that," she said. "But what I heard was some optimism about transforming health care."

She said that the coming changes were "not perfect," but would move the state in the right direction and "make a difference in real Colorado lives."

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